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US oil industry may escape severe damage from Hurricane Isaac

Big oil companies operating in the Gulf of Mexico may have escaped major damage to their platforms as Hurricane Isaac weakens to become a tropical storm.

Homes and businesses were cut of from electricity supply on Wednesday as the hurricane arrived in Louisana with maximum sustained winds of 80mph, but so far no discernible damage to refineries or offshore oil and gas platforms have been reported.

The National Hurricane Center downgraded Isaac from a hurricane to a tropical storm as of 3 p.m. EDT. The storm then continued to crawl slowly inland.

Shell said it plans to begin flyover inspections of its platforms in the Gulf of Mexico on 31 August, while BP and Chevron are waiting for weather conditions to improve, reports Reuters.

"Some 936,500 barrels a day of refining capacity, or 5.5% of the US total, remained offline."

Kenneth Medlock, Rice University Baker Institute energy expert, told the news agency that offshore rigs may start operations in about a week. "The offshore facilities should be OK with regard to major damage. I would not expect a prolonged production outage," said Medlock.

Data from the US Government revealed that 95% of oil and 72% of natural gas production in the US Gulf of Mexico remained closed as a precautionary measure.

Some 936,500 barrels a day of refining capacity, or 5.5% of the US total, remained offline due to Isaac.